Access to Rural Road Transport and Smallholder Commercialization in Ethiopia: Evidence From the Ethiopian Socioeconomic Survey

Abstract

ABSTRACT With more than 80% of the population living in rural areas and Ethiopia being primarily an agrarian nation, the development of rural infrastructure is crucial for boosting the country's socioeconomic development. This study investigated how access to rural road transport affects smallholder commercialization in Ethiopia, using double hurdle model. For this study, a data for 1967 rural households were compiled from wave four and wave five of the nationally representative Ethiopian socioeconomic survey, run by the central statistics agency of Ethiopia and the World Bank Living Standards Measurement Study‐Integrated Surveys on Agriculture team. The descriptive statistics result shows that approximately 54.35% of households in rural Ethiopia have access to an all‐weather road, indicating a moderate level of connectivity. The study finds that road access significantly improves market participation and the extent of commercialization, though the effect on sales is small. Therefore, there should be investments in market infrastructure, access to institutional supports, agricultural productivity, irrigation, and climate‐smart agriculture in addition to rural roads to help farmers produce more and supply output to the market. Furthermore, designing region‐specific policies can enhance output market participation of smallholder farmers.